Pirates: Rational Profit Maximizing Entrepreneurs of the Sea

You have to love a good Pirates/Economics story.

Game Theory Ninja

Pirates are awesome.  Economics: also awesome.  The combination?

Check out this report: The Economics of Piracy.  It uses data from 1500 Somalian pirates to look at the future of international piracy.  An excerpt:

Pirates would appear to be the very essence of rational profit maximizing entrepreneurs described in neo-classical economics. Expected profits determine decisions based on the information available. The supply of pirates, therefore, is closely related to the expected benefits of being a pirate and the associated risk adjusted costs.

Yep. You read that right. Pirates are economics bad-asses.

The paper, which looks primarily at Somalian pirates, explores piracy in several arenas, and concludes that incidents of piracy will substantially expand in the coming years, primarily due to the rising income disparity betwen pirates and non-pirates.

How big a problem is piracy? In 2010, the cost of piracy to the international community was between $4.9 and $8.3 billion. …

View original post 100 more words


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s